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2022 (10) TMI 411 - AT - Income TaxExemption u/s 11 - registration u/s 12AA rejected - assessee society is registered under the Rajasthan Societies Registration Act, 1958 and running a school - CIT(E) raised an issue that, on enquiry, it is seen that the assessee is showing lower tuition fee and not disclosing bus fee in the books of account - HELD THAT:- Material collected behind the back of assessee could not be utilized against assessee unless the copy of the same was supplied to the assessee and he was given an opportunity to rebut the same. The assessee furnished full explanation to the query raised. No opportunity was provided to the assessee for cross-examination. Such material cannot be used against the assessee unless he is supplied the copy of such material and is allowed an opportunity to rebut the same. Similarly, any statement recorded behind the back of the assessee cannot be used against him unless the assessee is supplied the copy of the statement and is allowed an opportunity to cross-examine. As per record, no documentary evidence of field enquiry was provided to the assesseesociety. Even it is not clear from the record as to whether such enquiry was made from parents or minor students. No statements were recorded in writing of any of the witnesses and no opportunity of cross examination was provided. In this regard, we rely upon the decision in the case of Kishinchand Chellaram [1980 (9) TMI 3 - SUPREME COURT] wherein the Hon'ble Supreme Court has held that any material not confronted to assessee would not constitute as 'admissible evidence'. An institute though registered u/s 12AA, would still be taxed on the income which has not been applied in accordance with section 11 or in respect of which section 13 comes into play. Thus, the registration U/s 12AA is only fait accompli to the objects of the institution. The activities of an institution though genuine at the time of grant of registration may not remain so during its life span and the registration granted to it cannot be ‘life time guarantee’ that it would remain so, that is why the law prescribes procedure for withdrawal of registration once granted. Considering the totality of the facts, circumstances and legal position, we are of the view that the application submitted by the assessee-society is in consonance with the procedural requirement prescribed in this regard. From the constitution and other documents of the assessee-society which were filed before the Ld. CIT(E), the objects of the society could be ascertained. Even during the pendency of appeal before us, the assessee-society has submitted affidavits as well as balance sheets and these affidavits are in the shape of confirmations coupled with Aadhar Card of the respective persons wherein they have denied the allegations leveled upon the assessee-society. Copies of the said documents were given to the opposite party but the said documents were not rebutted by leading any evidence. Thus, in that eventuality, we also draw inference that the allegations upon the assessee could not be proved by the Revenue and thus from the same and from factual activity of running school, it is evident that the objects of the society are charitable in nature and are in tune with section 2(15) of the Act and, therefore, the order of the CIT (E) rejecting the application u/s 12AA of the Act is set aside and we allow the appeal of the assessee.
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